Thames Water to charge customers an extra £29 because it needs more profitsAugust 13th, 2013 • 6 Comments
Remember that big South East water company that got everyone’s back up over its dry tax coffers? Well, now it wants everyone to feel sorry for it, as it has endured a “tough time” financially. Aw diddums.
That’s right Thames Water is apparently very distressed by its measly £144.9m profit in the year to the end of March – blamed on the freezing weather and rising levels of bad debt. This amount was down by 20% on the previous year, despite a 6.7% price increase for its cash strapped customers. At least the Chief Exec still got his payrise, now earning £450,000 a year plus a £274,000 bonus last time.
In any case, Thames Water have now applied to the regulator Ofwat to ask for their blessing to add an extra £29 to every customer’s bill to prop up their profits.
This ‘need more profits levy’ increase, on top of a 1.4% rise already planned for next year, would see Thames customers’ average bills go up from £354 to as much as £396.
Of course some of the extra charge is being laid at the door of the super sewer, being built to take all the crap out of London, but up to £16 (55%) is actually to cover Thames Water for the bad debts of other customers. Figures suggest that around 200,000 of Thames’ customers did not pay their bill, and the company has ‘no legal power to chase them through the courts’.
Stuart Siddall, Thames Water finance chief, told the Daily Telegraph that there had been a 50% increase in unpaid bills since the recession began saying: “Before the recession bad debts were running at £40 million a year, but now they are up at £65 million. One in 25 bills are not being paid.” Other privately owned companies do not get customers who do pay their bills to subsidise those who don’t. It would be interesting to see what Thames Water would do if everyone refused to pay their bill in protest, assuming Ofwat agree Thames’ request.
Any revisions to price limits will not apply to customers’ bills before April 2014.
“the company has no legal power to chase them through the courts”.
“What action can your water company take to get their money back?
Whenever you get a bill, check to make sure it’s your bill and has been worked out correctly. After sending your bill, a water company may:
send one or more reminder notices, with the final notice giving you seven days to pay. If you have more than one unpaid water bill, you should get separate reminder notices for each bill
telephone you to ask for payment
pass your debt to a debt recovery agent.
As a last resort, the company can take you to court to get a county court judgment to recover the money you owe. You may then get a letter from a firm of bailiffs telling you they are going to come round. If they come and you let them in they could take goods to sell to pay the money you owe.”
“Other privately owned companies do not get customers who do pay their bills to subsidise those who don’t.”
Any well run one does, they build a provision for bad debts into their overheads and price their goods and services accordingly. They just aren’t as open about doing it.
IIRC, dividends to their shareholders last year accounted for about £15 per customer. Perhaps dividends should only have been paid if Thames had properly scoped out the work when it agreed the new tariffs back in 2009. Then, the extra levy per customer wouldn’t have been needed.
Funny there is no legal recourse for unpaid bills, I know you can’t stop a water supply, but that’s no reason not to allow the balliffs to come knocking.
And anyway have you seen how much they are actually in debt? This increase makes no difference atall to that, but as it’s a long term thing it’s not a problem.
Aren’t these companies run for the shareholders?
If people don’t like the levy just change supplier, vote with your feet people…